what is the IRR

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March 3, 2017 at 4:10 pm #375328
Yong
Participant
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Initial investment 350K
Incremental cash flow Discounted Cash flow 20% Disc Cash flow 20%
Year 1 50 0.833 41.65
Year 2 110 0.694 76.34
Year 3 130 0.579 75.27
Year 4 150 0.482 72.3
Year 5 100 0.402 40.2
NPV 48 (10%) 41.24
What is the IRR?
The answer is 15.4%. (10 + (48/(48+41.24) x 10)
However, I am not able to get 41.24. (instead I get 44.24), can please assist to explain how 41.24 is derived.
Thank you.
March 3, 2017 at 6:55 pm #375351
John Moffat
Keymaster
- Topics: 57
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I get 44.24 also.
Either there is a typing error in the answer, or you have copied wrongly (without seeing the actual question I can’t know).
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